Davis v. Petito, No. 30

• Court: Court of Appeals of Maryland
• Writing for the Court: BATTAGLIA
• Citation: 39 A.3d 96,425 Md. 191
• Parties: Joanna DAVIS v. Michael A. PETITO, Jr.
• Decision Date: 27 February 2012
• Docket Number: No. 30,2011.,Sept. Term

39 A.3d 96
425 Md. 191

Joanna DAVIS
v.
Michael A. PETITO, Jr.

No. 30

Sept. Term

2011.

Court of Appeals of Maryland.

Feb. 27, 2012.

[39 A.3d 96]

John R. Seward (Donald P. Salzman, Washington, DC), on brief, for petitioner.

[39 A.3d 97]

Laura E. Hay (Cockey, Brennan & Maloney, P.C., Salisbury, MD), on brief, for respondent.

K. Lee Blalack II, Robert N. Eccles, Theresa S. Gee, O'Melveny & Myers LLP, Washington, DC, for Amici Curiae brief of Justice for Children and Domestic Violence Legal Empowerment and Appeals Project.

Argued before BELL, C.J., HARRELL, BATTAGLIA, GREENE, ADKINS, BARBERA and JOHN C. ELDRIDGE (Retired, Specially Assigned), JJ.

BATTAGLIA, J.

[425 Md. 193] We have been asked to consider whether the gratuitous cost of pro bono legal services,¹ provided to a party in a custody modification proceeding, may be considered in awarding attorneys' fees, pursuant to Section 12–103 of the Family Law Article, Maryland Code (1984, 2006 Repl.Vol.),² to the other party, who had retained private counsel. Joanna Davis, Petitioner, was ordered by the Circuit Court for Wicomico County to pay her ex-husband Michael A. Petito, Jr., Respondent, $30,773.54 in attorneys' fees and costs, because the trial court [425 Md. 194] determined that she was in a better financial position than Mr. Petito, due to her having received pro bono representation by the Sexual Assault Legal Institute (SALI),³ whereas Mr. Petito had accumulated over $70,000 in legal fees as a result of retaining private counsel.

The Court of Special Appeals affirmed the trial court's order in a reported opinion, Davis v. Petito, 197 Md.App. 487, 14 A.3d 692 (2011), even though Ms. Davis had argued that the trial court's order discounting any perceived value associated with her representation contravened this Court's decision in Henriquez v. Henriquez, 413 Md. 287, 992 A.2d 446 (2010), in which we interpreted Section 12–103 to

[39 A.3d 98]

permit an attorneys' fee award to a prevailing party, who also had received pro bono legal representation. ⁴ We granted certiorari, 420 Md. 81, 21 A.3d 1063 (2011), to consider the following question:

In determining an award of costs and attorney's fees in a custody case, Family Law Article § 12–103(b)(2) of the Maryland Code requires the courts to consider, inter alia, the financial status and needs of each party. In assessing the parties' financial status and needs, and ultimately ordering the Mother to pay $30,773.54 of the Father's legal expenses, was it appropriate for the lower court to consider the fact that the Mother was represented pro bono and to disregard her day-to-day financial needs, particularly as they relate to caring for the Child?

[425 Md. 195] We shall hold that the consideration that one party was represented on a pro bono basis, in order to award attorneys' fees to the other party who had retained counsel was erroneous under Section 12–103, and we shall order a remand to the trial court for reconsideration of the statutory factors in light of this opinion.

Background

Joanna Davis and Michael Petito were married on December 12, 1998 and have one daughter, Sophia, born on October 22, 2003. In April of 2006, the Circuit Court for Wicomico County granted them an absolute divorce and awarded them joint legal custody but primary physical custody of the child to Ms. Davis.

In December of 2008, Ms. Davis, through retained counsel, filed an Emergency Complaint for Immediate Custody, Injunctive Ex Parte and Pendente Lite Relief, in which she sought sole legal and physical custody of Sophia, because she alleged that Mr. Petito had sexually abused the child. Mr. Petito denied the allegations, initially without counsel and later, after having retained private counsel, filed a Counter Complaint for Modification of Custody, seeking joint physical and legal custody of Sophia and a decrease in his child support payments; he also specifically requested attorneys' fees. Eventually, Ms. Davis could not afford to pay an attorney and secured the services of SALI on a pro bono basis.

A hearing ensued but, after the first five days, the Circuit Court Judge determined that Ms. Davis had not established by preponderance of the evidence that there was “any form of sexual abuse” by Mr. Petito; specifically, she found that “none of [Ms. Davis's] experts are able to offer consistent credible opinions as to what exactly happened,” while she found “convincing and credible” the testimony of Mr. Petito's expert, who was offered “for the general proposition that the minor child's statements in this case are insufficient to support a finding of sexual abuse.” The parties then presented both oral and written comments regarding the award of attorneys' fees under Section 12–103.

[425 Md. 196] As to attorneys' fees and costs, Mr. Petito submitted a request for $76,052, arguing that the judge should award him the total

[39 A.3d 99]

amount under Section 12–103, because Ms. Davis lacked substantial justification to seek a modification in child custody. He also asserted that Ms. Davis had “ financial circumstances [that] far exceed[ed] Mr. Petito's financial circumstances” because she owned her own home and had pro bono representation, while he did not own property and had had retained private counsel; according to him, the Sexual Assault Legal Institute's representation of Ms. Davis meant that “her attorneys' fees have been paid in full whereas Mr. Petito has incurred debts in the sum of $61,340 ... borrowed from his 401 K and incurred significant unsecured liabilities....”

Ms. Davis conversely submitted a request for an award of attorneys' fees and costs in the amount of $14,080.12, representing the amount she paid to her private attorney before she retained SALI. She urged that Mr. Petito was in a better financial position to pay for attorneys' fees because his family had given him interest-free loans, whereas Ms. Davis had “no ability to pay [his] counsel fees,” having “less than $2,000.00 in cash.” She maintained that she had substantial justification to bring her claim based on the allegations of sexual abuse.

The judge awarded Mr. Petito $30,773.54 in attorneys' fees,⁵ reasoning that Mr. Petito had substantial justification for [425 Md. 197] defending himself in this proceeding and that Ms. Davis's financial circumstances were better than that of Mr. Petito because she had been represented on a pro bono basis, whereas Mr. Petito had incurred significant debt as a result of retaining private counsel:

The Court may order attorneys fees under Family Law Article § 12–103, Annotated Code of Maryland, but not before considering the financial status of each party, the needs of each party, and whether there was substantial justification for bringing or defending the proceeding. Lieberman v. Lieberman, 81 Md.App. 575, 601 [568 A.2d 1157] (1990). The Court acknowledges that each party has expended significant financial resources as a result of this case. Mr. Petito, however, has suffered disproportionate financial hardship from these proceedings. His counsel was privately retained, unlike Ms. Davis's representation, which has been without charge since October 2009. He has exhausted his savings, credit, and taken loans in excess of $10,000 from his family. There can be no doubt that the needs of both parties are high, especially in light of the resources expended in these proceedings. The Court finds that Mr. Petito had a substantial justification in defending himself in these proceedings, initiated by Ms. Davis. While the Court recognizes the struggle that any parent must have when believing their child has been sexually abused, particularly when

[39 A.3d 100]

the suspected abuser is the other parent, the Court ultimately was unable to make a finding that the evidence supported that sexual abuse occurred. Without defending himself, Mr. Petito risked losing his parental relationship with Sophia. By contrast, Ms. Davis was represented pro bono by SALI, and should bear shared responsibility for the legal fees according to her income in light of the full record herein.

Ms. Davis thereafter filed a Motion to Alter or Amend the Order, arguing that the judge's consideration of the pro bono [425 Md. 198] status of Ms. Davis's representation in awarding Mr. Petito attorneys' fees and costs under Section 12–103 was erroneous in light of our holding in Henriquez, 413 Md. 287, 992 A.2d 446, which had been filed within days before the judge's ruling. Ms. Davis argued that “it is without significance that Ms. Davis is currently under retainer with a legal services organization,” and the Circuit Court should have instead focused on Ms. Davis's financial circumstances and needs, namely her inability to afford to pay Mr. Petito's fees; the judge denied Ms. Davis's Motion.

Ms. Davis timely appealed to the Court of Special Appeals,⁶ which affirmed the trial court's order in a reported opinion, [425 Md. 199] 197 Md.App. 487, 14 A.3d 692 (2011), concluding that the Circuit Court Judge properly considered the impact of the disparity in the cost of the parties' attorneys' fees on each party's financial status, needs and substantial justification for bringing or defending the proceeding. The Circuit Court's consideration that Ms. Davis was represented pro bono was limited to “account[ing] for the amount of fees she had paid or was obligated to pay being substantially lower than what Petito would pay.” 197 Md.App. at 533, 14 A.3d at 718. The intermediate appellate court rejected Ms. Davis's challenge that the Circuit Court Judge did not consider the relative needs of the parties, because the

[39 A.3d 101]

Circuit Court Judge considered the parties' monthly incomes and amounts of attorneys' fees incurred and determined that Mr. Petito's justification in defending himself in the proceeding was more substantial than Ms. Davis's justification in bringing it, and therefore justified his incurrence of more attorneys' fees than Ms. Davis as well as the court's decision...